ORIENT OVERSEAS (INTERNATIONAL) LIMITED. (Incorporated in Bermuda with Limited Liability) (Stock code: 316)

Transcription

1 ORIENT OVERSEAS (INTERNATIONAL) LIMITED 東方海外 ( 國際 ) 有限公司 (Incorporated in Bermuda with Limited Liability) (Stock code: 316) ANNOUNCEMENT OF INTERIM RESULTS FOR THE SIX MONTHS ENDED 30TH JUNE 2010 The Directors of Orient Overseas (International) Limited (the Company ) announce the unaudited interim results of the Company and its subsidiaries (the Group ) for the six months ended 30th June 2010, which have been reviewed by our auditor, PricewaterhouseCoopers whose unmodified review report is included in the Interim Report to be sent to Shareholders. Condensed Consolidated Profit and Loss Account (unaudited) For the six months ended 30th June 2010 Restated US$'000 Note Continuing operations Revenue 5 2,732,616 2,065,138 Operating costs (2,192,265) (2,044,974) Gross profit 540,351 20,164 Fair value loss from an investment property - (15,000) Other operating income 11,279 26,465 Other operating expenses (241,710) (223,333) Operating profit/(loss) 6 309,920 (191,704) Finance costs 8 (13,425) (21,113) Share of profits of jointly controlled entities Share of profits of associated companies 2,653 1,181 Profit/(loss) before taxation 299,801 (211,017) Taxation 9 (12,462) (8,242) Profit/(loss) for the period from continuing operations 287,339 (219,259) Discontinued operation : Profit/(loss) for the period from discontinued operation 10 1,004,354 (11,807) Profit/(loss) for the period 1,291,693 (231,066) Profit/(loss) attributable to : Equity holders of the Company 1,284,628 (231,848) Non-controlling interests 7, ,291,693 (231,066) Interim and special dividends ,283 - Earnings/(loss) per ordinary share (US cents) 12 - from continuing operations 44.8 (35.1) - from discontinued operation (1.9) Basic and diluted (37.0) Year 2009 figures have been restated or reclassified to disclose the results of discontinued operation in a separate line

2 Condensed Consolidated Statement of Comprehensive Income (unaudited) For the six months ended 30th June 2010 US$' Profit/(loss) for the period 1,291,693 (231,066) Other comprehensive income: Vessels - Assets revaluation reserve realised (1,915) - Available-for-sale financial assets - Change in fair value 8,218 (14,099) - Assets revaluation reserve realised - (774) Currency translation adjustments (956) 4,436 Other comprehensive income/(loss) for the period 5,347 (10,437) Total comprehensive income/(loss) for the period 1,297,040 (241,503) Total comprehensive income/(loss) attributable to : Equity holders of the Company 1,289,981 (242,299) Non-controlling interests 7, ,297,040 (241,503) - 2 -

3 CONDENSED CONSOLIDATED BALANCE SHEET (unaudited) As at 30th June 2010 US$'000 Note 30th June 31st December ASSETS Non-current assets Property, plant and equipment 13 3,845,752 3,798,048 Investment property , ,000 Prepayments of lease premiums 13 10,153 10,175 Jointly controlled entities 2,302 4,465 Associated companies 60,117 59,737 Intangible assets 13 50,126 53,104 Deferred taxation assets 1, Pension and retirement assets 25,811 27,213 Derivative financial instruments 15 6,004 - Restricted bank balances 1, Other non-current assets 232, ,670 4,384,736 4,323,706 Current assets Inventories 108,480 83,561 Debtors and prepayments , ,234 Portfolio investments 67,439 44,592 Derivative financial instruments ,965 Restricted bank balances 948 1,760 Cash and bank balances 3,817,052 1,225,102 4,456,481 1,738,214 Assets held for sale - 1,268,254 4,456,481 3,006,468 Total assets 8,841,217 7,330,174 EQUITY Equity holders Share capital 16 62,579 62,579 Reserves 17 5,180,291 3,882,105 5,242,870 3,944,684 Non-controlling interests 6,437 23,723 Total equity 5,249,307 3,968,407 LIABILITIES Non-current liabilities Borrowings 19 2,546,480 2,135,967 Deferred taxation liabilities 36,369 30,697 Pension and retirement liabilities 2,363 3,130 Derivative financial instruments 15 11,020-2,596,232 2,169,794 Current liabilities Creditors and accruals , ,083 Derivative financial instruments 15-6,110 Borrowings , ,055 Current taxation 12,201 10, ,678 1,049,567 Liabilities directly associated with assets classified as held for sale - 142, ,678 1,191,973 Total liabilities 3,591,910 3,361,767 Total equity and liabilities 8,841,217 7,330,174 Net current assets 3,460,803 1,814,495 Total assets less current liabilities 7,845,539 6,138,

4 CONDENSED CONSOLIDATED CASH FLOW STATEMENT (unaudited) For the six months ended 30th June 2010 US$'000 Note Cash flows from operating activities Cash generated from/(used in) operations 475,244 (248,935) Interest paid (7,814) (12,948) Interest element of finance lease rental payments (9,207) (27,241) Dividend on preference shares - (3,235) Hong Kong tax refunded 2,473 - Overseas taxes paid (2,069) (14,720) Net cash from/(used in) operating activities 458,627 (307,079) Cash flows from investing activities Sale of property, plant and equipment 13,114 8,307 Sale of available-for-sale financial assets 228 3,936 Sale of held-to-maturity investments 15,290 1,942 Purchase of property, plant and equipment (63,754) (117,417) Purchase of available-for-sale financial assets (52) (30) Purchase of held-to-maturity investments (17,781) (13,403) (Increase)/decrease in portfolio investments (22,847) 2,366 Disposal of subsidiaries 22 2,130,202 - Acquisition of non-controlling interests (14,123) - Decrease in amounts due by jointly controlled entities 2, (Increase)/decrease in restricted bank balances and bank deposits maturing more than three months from the date of placement (1,522,412) 113,854 Purchase of intangible assets (1,960) (7,110) (Increase)/decrease in other non-current assets (1,228) 7,195 Interest received 4,477 11,919 Income from available-for-sale financial assets 7 3 Dividends received from portfolio investments Dividend received from an associated company 2,599 - Dividend received from a jointly controlled entity Net cash from investing activities 524,875 13,016 Cash flows from financing activities New loans 559, ,098 Repayment of loans (441,223) (83,763) Redemption of preference shares - (45,689) Capital element of finance lease rental payments (26,342) (35,445) Dividends paid to shareholders - (28,187) Dividend paid to non-controlling interests (2,017) (842) Net cash from/(used in) financing activities 90,258 (17,828) Net increase/(decrease) in cash and cash equivalents 1,073,760 (311,891) Cash and cash equivalents at beginning of period 1,088,254 1,778,453 Currency translation adjustments (4,286) 9,090 Cash and cash equivalents at end of period 2,157,728 1,475,652 Analysis of cash and cash equivalents Bank balances and deposits maturing within three months from the date of placement 2,157,842 1,475,795 Bank overdrafts (114) (143) 2,157,728 1,475,

5 CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (unaudited) For the six months ended 30th June 2010 Equity holders Non- Share controlling US$'000 capital Reserves Sub-total interests Total Balance at 31st December ,579 3,882,105 3,944,684 23,723 3,968,407 Total comprehensive income for the period - 1,289,981 1,289,981 7,059 1,297,040 Transactions with owners Acquisition of non-controlling interests - 8,205 8,205 (22,328) (14,123) Dividend paid to non-controlling interests (2,017) (2,017) Balance at 30th June ,579 5,180,291 5,242,870 6,437 5,249,307 Balance at 31st December ,579 4,324,492 4,387,071 34,292 4,421,363 Total comprehensive (loss)/ income for the period - (242,299) (242,299) 796 (241,503) Transactions with owners 2008 final dividend - (28,187) (28,187) - (28,187) Dividend paid to non-controlling interests (842) (842) Balance at 30th June ,579 4,054,006 4,116,585 34,246 4,150,

6 Notes to the Condensed Interim Financial Information 1. General Information Orient Overseas (International) Limited (the Company ) is a limited liability company incorporated in Bermuda. The address of its registered office is 33rd floor, Harbour Centre, No. 25 Harbour Road, Wanchai, Hong Kong. The Company has its listing on the Main Board of The Stock Exchange of Hong Kong Limited. On 18th January 2010, the Board announced that the Company had entered into the Sale and Purchase Agreement with CapitaLand China (RE) Holdings Co., Ltd. to sell its entire interest in Orient Overseas Developments Limited and its subsidiaries and jointly controlled entities (collectively referred to as the Disposal Group ) and the assignment and transfer of the shareholder s loan for an aggregate consideration of US$2.2 billion, receivable in cash. The transaction was completed on 10th February After transaction costs, the gain arising on the disposal was approximately US$1.0 billion which had been recognised in the consolidated profit and loss account for the six months ended 30th June Analysis of the results, cash flows, assets and liabilities of the Disposal Group is presented in notes 10 and 22. This interim financial information was approved by the Board of Directors on 4th August Basis of Preparation The interim financial information has been prepared in accordance with Hong Kong Financial Reporting Standards ( HKFRS ). They have been prepared under the historical cost convention, as modified by the revaluation of investment property, certain property, plant and equipment, available-for-sale financial assets, financial assets and financial liabilities (including derivative financial instruments) at fair value through profit or loss, which are carried at fair value and in accordance with HKAS 34 Interim Financial Reporting issued by the Hong Kong Institute of Certified Public Accountants. The accounting policies and methods of computation used in the preparation of the interim financial information are consistent with those used in the annual accounts for the year ended 31st December

7 2. Basis of Preparation (Continued) The adoption of new/revised HKFRS In 2010, the Group adopted the new standards, amendments and interpretations of Hong Kong Financial Reporting Standards below, which are relevant to its operations. HKAS 7 Amendment HKAS 17 Amendment HKAS 36 Amendment HKAS 27 (Revised) HKFRS 3 (Revised) HKFRS 5 Amendment HKFRS 8 Amendment Statement of Cash Flows Leases Impairment of Assets Consolidated and Separate Financial Statements Business Combinations Non-current assets held for sale and discontinued operations Operating Segments Annual improvements to HKFRS published in May 2009 HKAS 1 Amendment HKAS 7 Amendment HKAS 17 Amendment HKAS 18 Amendment HKAS 36 Amendment HKAS 38 Amendment HKFRS 5 Amendment HKFRS 8 Amendment Presentation of Financial Statements Statement of Cash Flows Leases Revenue Impairment of Assets Intangible Assets Non-current assets held for sale and discontinued operations Operating Segments The Group has assessed the impact of the adoption of these new standards, amendments and interpretations and considered that there was no significant impact on the Group s results and financial position nor any substantial changes in the Group s accounting policies and presentation of the accounts except for HKAS 27 (Revised) as set out below: HKAS 27 (Revised) requires the effects of all transactions with non-controlling interests that do not result in the change of control to be recorded as equity transactions and these transactions will no longer result in goodwill or gains and losses. When control is lost, any remaining interest in the entity is remeasured to fair value, the difference between its fair value and carrying amount is recognised in the consolidated profit and loss account. The adoption of HKAS 27 (Revised) has resulted in a difference between the consideration paid and the relevant share of the carrying net asset value acquired from the non-controlling interests of US$8,205,000 which is now recorded in equity

8 2. Basis of Preparation (Continued) Standards, interpretations and amendments to existing standards that are relevant but not yet effective New or revised standards, interpretations and amendments Effective for accounting periods beginning on or after HKAS 32 Amendment Classification of Rights Issues 1st February 2010 HK(IFRIC) Int 19 Extinguishing financial liabilities 1st July 2010 with equity instruments HKAS 24 (Revised) Related Party Disclosure 1st January 2011 HK(IFRIC) Int 14 Prepayment of a minimum funding 1st January 2011 Amendment requirement HKFRS 9 Financial instruments 1st January 2013 Annual improvement to HKFRS published in May 2010 HKFRS 3 (Revised) Business combinations 1st July 2010 HKAS 1 Presentation of Financial Statements 1st January 2011 HKAS 27 Consolidated and Separate Financial Statements 1st January 2011 HKAS 34 Interim Financial Reporting 1st January 2011 HKFRS 7 Financial Instruments : Disclosure 1st January 2011 The Group has not early adopted the above standards, amendments and interpretations and is not yet in a position to state whether substantial changes to the Group s accounting policies and presentation of accounts will result. 3. Financial Risk Management All aspects of the Group s financial risk management objectives and policies are consistent with those disclosed in the annual accounts for the year ended 31st December Critical Accounting Estimates and Judgements Estimates and judgements used are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions applied in the preparation of the interim financial information are consistent with those used in the annual accounts for the year ended 31st December

9 5. Revenue US$' Container transport and logistics 2,720,717 2,053,268 Others 11,899 11,870 2,732,616 2,065,138 The principal activities of the Group are container transport and logistics. Revenue comprises turnover which includes gross freight, charterhire, service and other income from the operation of the container transport and logistics and rental income from the investment property

10 6. Operating Profit/(Loss) US$' Continuing Continuing Discontinued operations operations operation Operating profit/(loss) is arrived at after crediting : Interest income from banks 5,944 6, Interest income from held-to-maturity investments 2,723 1,184 - Gross rental income from an investment property 11,899 11,870 - Profit on disposal of property, plant and equipment Profit on disposal of held-to-maturity investments Profit on disposal of available-for-sale financial assets - 1,407 - Gain on interest rate swap contracts Gain on foreign exchange forward contracts - 8,047 - Portfolio investment income 155 8,113 - and after charging : Depreciation Owned assets 84,963 56,417 1,819 Leased assets 42,899 35,286 - Operating lease rental expense Vessels and equipment 151, ,413 - Land and buildings 11,046 12, Rental outgoings in respect of an investment property 5,591 5,363 - Loss on interest rate swap contracts - 3,043 - Loss on currency option contracts Loss on foreign exchange forward contracts 2, Loss on disposal of property, plant and equipment - 1,509 - Loss on disposal of held-to-maturity investments Amortisation of intangible assets 4,937 3, Amortisation of leasehold land and land use rights Exchange loss 7,518 3,

11 7. Key Management Compensation US$' Salaries and other short-term employee benefits 3,893 3,262 Pension costs - defined contribution plans ,064 3, Finance Costs US$' Interest expense (13,932) (20,901) Amount capitalised under assets 507 1,392 Net interest expense (13,425) (19,509) Dividend on preference shares - (1,604) (13,425) (21,113) 9. Taxation US$' Current taxation Hong Kong taxation (9) - Overseas taxation (6,862) (11,280) (6,871) (11,280) Deferred taxation Overseas taxation (5,591) 3,038 (12,462) (8,242) Taxation has been provided at the appropriate tax rates prevailing in the countries in which the Group operates on the estimated assessable profits for the period. These rates range from 12% to 47% (2009: 8% to 52%) and the rate applicable for Hong Kong profits tax is 16.5% (2009: 16.5%)

12 10. Discontinued Operation US$' (i) Results Revenue - 1,647 Operating costs - (3,645) Gross loss - (1,998) Other operating income Other operating expenses - (8,616) Operating loss - (9,935) Finance costs - (1,887) Share of profits less losses of jointly controlled entities Loss before taxation - (11,667) Taxation - (140) Loss after taxation - (11,807) Profit on disposal of subsidiaries (note 22) 1,004,354 - Profit/(loss) from discontinued operation 1,004,354 (11,807) (ii) Cash flows Operating cash flows - (256,287) Investing cash flows 1,004,354 (34,098) Financing cash flows - (43,912) Total cash flows 1,004,354 (334,297) 11. Interim and Special Dividends The Board of Directors declares an interim dividend for 2010 of US11.5 cents (2009: nil) per ordinary share. In addition, the Board of Directors proposes a special dividend of US40 cents per ordinary share as a result of the disposal of the Group s property development business in the People s Republic of China

13 12. Earnings/(Loss) Per Ordinary Share The calculation of basic and diluted earnings/(loss) per ordinary share is based on the Group s profit/(loss) attributable to equity holders of the Company divided by the number of ordinary shares in issue during the period. The basic and diluted earnings/(loss) per ordinary share are the same since there are no potential dilutive shares. US$' Number of ordinary shares in issue (thousands) 625, ,793 Group s profit/(loss) from continuing operations attributable to : Equity holders of the Company 280,274 (220,149) Non-controlling interests 7, ,339 (219,259) Earnings/(loss) per share from continuing operations attributable to equity holders of the Company (US cents) 44.8 (35.1) Group s profit/(loss) from discontinued operation attributable to : Equity holders of the Company 1,004,354 (11,699) Non-controlling interests - (108) 1,004,354 (11,807) Earnings/(loss) per share from discontinued operation attributable to equity holders of the Company (US cents) (1.9)

14 13. Capital Expenditure Property, Prepayments plant and Investment of lease Intangible US$'000 equipment property premiums assets Total Net book amounts : Balance at 31st December ,798, ,000 10,175 53,104 4,011,327 Currency translation adjustments (1) 287 Additions 190, , ,242 Disposals (14,797) (14,797) Depreciation and amortisation (127,862) - (229) (4,937) (133,028) Balance at 30th June ,845, ,000 10,153 50,126 4,056,031 Balance at 31st December ,780, ,000 14,201 47,098 4,017,244 Currency translation adjustments Fair value loss - (15,000) - - (15,000) Additions 120, , ,522 Disposals (9,816) (9,816) Depreciation and amortisation (93,522) - (217) (3,231) (96,970) Balance at 30th June ,798, ,000 13,985 50,978 4,023, Debtors and Prepayments 31st 30th June December US$' Trade receivables 321, ,667 Less : Provision for impairment (5,943) (5,664) Trade receivables - net 315, ,003 Other debtors 52,010 39,364 Other prepayments 76,226 80,321 Utility and other deposits 6,863 7,518 Tax recoverable 11,635 17, , ,

15 14. Debtors and Prepayments (Continued) Trade receivables are normally due for payment on presentation of invoices or granted with an approved credit period ranging mainly from 10 to 45 days. Trade receivables with overdue balances are requested to settle all outstanding balances before any further credit is granted. The ageing analysis of the Group s trade receivables, net of provision for impairment, prepared in accordance with the due date of invoices, is as follows: 31st 30th June December US$' Below one month 304, ,184 Two to three months 11,293 12,397 Four to six months , , Derivative Financial Instruments 31st 30th June December US$' Assets Non-current assets Interest rate swap contracts 6,004 - Current assets Interest rate swap contracts 317 2,965 Liabilities Non-current liabilities Interest rate swap contract (2,824) - Foreign exchange forward contract (8,196) - (11,020) - Current liability Foreign exchange forward contract - (6,110)

16 16. Share Capital 31st 30th June December US$' Authorised : 900,000,000 ordinary shares of US$0.10 each 90,000 90,000 65,000,000 convertible redeemable preferred shares of US$1 each 65,000 65,000 50,000,000 redeemable preferred shares of US$1 each 50,000 50, , ,000 Issued and fully paid : 625,793,297 (2009: 625,793,297) ordinary shares of US$0.10 each 62,579 62,

17 17. Reserves Asset revaluation reserve Foreign Capital exchange Share Contributed redemption Available-for-sale translation Retained US$'000 premium surplus reserve Vessels financial assets reserve profit Total Balance at 31st December ,457 88,547 4,696 1,915 44,398 44,563 3,525,529 3,882,105 Total comprehensive income/(loss) for the period (1,915) 8,218 (950) 1,284,628 1,289,981 Acquisition of non-controlling interests ,205 8,205 Balance at 30th June ,457 88,547 4,696-52,616 43,613 4,818,362 5,180,291 Balance at 31st December ,457 88,547 4,696 9,948 53,385 39,449 3,956,010 4,324,492 Total comprehensive income/(loss) for the period (14,873) 4,422 (231,848) (242,299) 2008 final dividend (28,187) (28,187) Balance at 30th June ,457 88,547 4,696 9,948 38,512 43,871 3,695,975 4,054,006 Total comprehensive income/(loss) for the period (8,033) 5, (170,446) (171,901) Balance at 31st December ,457 88,547 4,696 1,915 44,398 44,563 3,525,529 3,882,

18 18. Creditors and Accruals 31st 30th June December US$' Trade payables 237, ,111 Other creditors 56,232 61,328 Accrued expenses 388, ,988 Deferred revenue 64,104 61, , ,083 The ageing analysis of the Group s trade payables, prepared in accordance with date of invoices, is as follows: 31st 30th June December US$' Below one month 188, ,856 Two to three months 44,173 49,532 Four to six months 3,272 3,463 Over six months 1, , ,

19 19. Borrowings 31st 30th June December US$' Non-current Bank loans - secured 895, ,225 - unsecured 90,611 21,190 Loans from non-controlling interests - secured - 139,100 - unsecured - 18,232 Finance lease obligations 1,560,793 1,466,220 2,546,480 2,135,967 Current Bank overdrafts, unsecured Bank loans - secured 154, ,623 - unsecured 32, ,042 Loans from non-controlling interests - secured - 106,500 - unsecured - 9,562 Finance lease obligations 50,796 48, , ,055 Total borrowings 2,783,794 2,568,

20 20. Commitments (a) Capital commitments 30th June 31st December US$' Contracted but not provided for - Continuing operations 662, ,803 - Discontinued operation - 6, , ,092 Authorised but not contracted for - Continuing operations 13,868 16, , ,679 (b) Operating lease commitments The future aggregate minimum lease rental expenses under non-cancellable operating leases are payable in the following years : Vessels and Land and US$'000 equipment buildings Total As at 30th June /11 171,408 29, , /12 97,822 16, , /13 83,531 10,139 93, /14 78,428 5,187 83, /15 77,510 1,589 79, /16 onwards 461, , ,468 62,894 1,033,362 As at 31st December ,810 31, , ,427 21, , ,747 12,890 96, ,220 6,171 87, ,872 3,902 81, onwards 500,097 1, ,472 1,064,173 77,405 1,141,

21 21. Segment Information The principal activities of the Group are container transport and logistics. Container transport and logistics include global containerised shipping services in major trade lanes, covering Trans-Pacific, Trans-Atlantic, Asia/Europe, Asia/Australia and Intra-Asia trades, and integrated services over the management and control of effective storage and flow of goods. In accordance with the Group s internal financial reporting provided to the chief operating decision-makers, who are responsible for allocating resources, assessing performance of the operating segments and making strategic decisions, the reportable operating segments are container transport and logistics and others

22 21. Segment Information (Continued) Operating segments The segment results for the six months ended 30th June 2010 are as follows: Discontinued Continuing operations operation Container transport Property US$'000 and logistics Others Elimination Sub-total development Group Revenue 2,720,717 12,375 (476) 2,732,616-2,732,616 Operating profit 302,811 7, , ,920 Finance costs (13,079) (346) - (13,425) - (13,425) Share of profits of jointly controlled entities Share of profits of associated companies 2, ,653-2,653 Profit before taxation 293,038 6, , ,801 Taxation (7,237) (5,225) - (12,462) - (12,462) Profit after taxation 285,801 1, , ,339 Profit on disposal of subsidiaries ,004,354 1,004,354 Profit for the period 285,801 1, ,339 1,004,354 1,291,693 Capital expenditure 192, , ,242 Depreciation 127, , ,862 Amortisation 5, ,166-5,

23 21. Segment Information (Continued) Operating segments (Continued) The segment results for the six months ended 30th June 2009 are as follows : Discontinued Continuing operations operation Container transport Property US$'000 and logistics Others Elimination Sub-total development Group Revenue 2,053,268 12,366 (496) 2,065,138 1,647 2,066,785 Operating (loss)/profit (196,636) 4,932 - (191,704) (9,935) (201,639) Finance costs (20,723) (390) - (21,113) (1,887) (23,000) Share of profits of jointly controlled entities Share of profits of associated companies 1, ,181-1,181 (Loss)/profit before taxation (215,559) 4,542 - (211,017) (11,667) (222,684) Taxation (7,948) (294) - (8,242) (140) (8,382) (Loss)/profit for the period (223,507) 4,248 - (219,259) (11,807) (231,066) Capital expenditure 127, , ,522 Depreciation 91, ,703 1,819 93,522 Amortisation 3, , ,448 Others mainly represent property investment and corporate level activities including central treasury management and administrative function. Inter-segment transfers or transactions are conducted at prices and terms mutually agreed amongst those business segments

24 21. Segment Information (Continued) Operating segments (Continued) The segment assets and liabilities as at 30th June 2010 are as follows: Container transport and logistics Others Total US$'000 As at 30th June 2010 Segment assets 4,859,073 3,919,725 8,778,798 Jointly controlled entities 2,302-2,302 Associated companies 60,117-60,117 Total assets 4,921,492 3,919,725 8,841,217 Segment liabilities (3,472,286) (119,624) (3,591,910) As at 31st December 2009 Segment assets 4,698,468 1,299,250 5,997,718 Jointly controlled entities 4,465-4,465 Associated companies 59,737-59,737 4,762,670 1,299,250 6,061,920 Assets held for sale (note 22) 1,268,254 Total assets 7,330,174 Segment liabilities (3,152,987) (66,374) (3,219,361) Liabilities directly associated with assets held for sale (note 22) (142,406) Total liabilities (3,361,767) Others primarily include assets and liabilities of property and corporate level activities. Other assets consist primarily of investment property, available-for-sale financial assets, held-to-maturity investments, loan to an investee company and portfolio investments together with restricted bank balances and cash and bank balances that are managed at corporate level. Other liabilities primarily include creditors and accruals, deferred tax liabilities, borrowings and derivative financial instruments related to corporate level activities

25 21. Segment Information (Continued) Geographical information The Group s two reportable operating segments operate in four main geographical areas, even though they are managed on a worldwide basis. Freight revenues from container transport and logistics are analysed based on the outbound cargoes of each geographical territory. The Group s total assets mainly include container vessels and containers which are primarily utilised across geographical markets for shipment of cargoes throughout the world. Accordingly, non-current assets by geographical areas are not presented. Capital US$'000 Revenue expenditure Six months ended 30th June 2010 Asia 1,816,014 3,356 North America 500, Europe 349, Australia 66, Unallocated* - 187,834 2,732, ,242 Six months ended 30th June 2009 Continuing operations : Asia 1,310,150 8,319 North America 427,776 2,086 Europe 270, Australia 56,468 5 Unallocated* - 116,645 2,065, ,211 Discontinued operation 1, ,066, ,522 * Unallocated capital expenditure comprises additions to vessels, dry-docking, containers and intangible assets

26 22. Disposal of Subsidiaries US$' Net assets disposed Property, plant and equipment 104,010 - Prepayments of lease premiums 3,467 - Goodwill 23,599 - Jointly controlled entities 9,804 - Deferred tax assets Inventories Properties under development and for sale 855,886 - Debtors and prepayments 8,554 - Cash and bank balances 262,124 - Total assets 1,268,254 - Borrowings, secured (87,565) - Deferred taxation liabilities (11,377) - Creditors and accruals (39,639) - Amount due to a jointly controlled entity (1,800) - Current taxation (2,025) - Total liabilities (142,406) - Net assets 1,125,848 - Profit on disposal 1,004,354 - Cash consideration, net 2,130,

27 Results for First Half 2010 For the first six months of 2010 Orient Overseas (International) Limited and its subsidiaries (the Group ) recorded a profit attributable to shareholders of US$1,284.6 million. This is a US$1,516.4 million increase compared to the loss attributable to shareholders of US$231.8 million for the corresponding period of The profit attributable to shareholders for the first half of 2010 includes a net profit on sale of the Group s PRC property development business ( OODL ) of US$1,004.4 million. The loss attributable to shareholders in the prior comparative period also included a US$15 million negative revaluation of Wall Street Plaza, whereas, based on the independent valuation received, no revaluation adjustment of Wall Street Plaza was made as at 30th June OOIL INTERIM RESULTS ANALYSIS (US$ 000) Profit/(loss) before tax from continuing activities 299,801 (196,017) Loss before tax from discontinued activities - (11,667) Revaluation of Wall Street Plaza - (15,000) Profit/(Loss) Before Tax for the Period Ended 30th June 299,801 (222,684) Taxation on continuing activities (12,462) (8,242) Taxation on discontinued activities - (140) Net Profit from sale of OODL 1,004,354 - Non-controlling Interests (7,065) (782) Profit/(Loss) Attributable to Shareholders 1,284,628 (231,848) Review of Operations Following last year s extremely difficult trading conditions, 2010 started positively for the container transportation sector with an improved supply/demand balance and upward pressure on freight rates. Despite the modest pace of the global economic recovery, we have seen rapid growth in demand over the first six months of the year. Demand was initially driven by a rebuilding of inventories following a run-down in holdings over the course of 2009, and more recently from stock levels being built ahead of anticipated strong consumer demand in the year-end shopping season. The strong demand has assisted with the absorption of new-build capacity delivering in the first half of the year, and has helped increase and hold rates at levels that will see the industry return to profitability in Slow steaming, while primarily undertaken for the environmental and cost-saving benefits, has also reduced the level of excess capacity in the industry

28 OOCL s total liftings for the half year were 11.6% higher than in the first six months of 2009, while freight revenue per TEU was 24.2% higher reflecting the improved rate environment this year. ORIENT OVERSEAS CONTAINER LINE LIFTINGS (TEU s) : CURRENT QUARTER YEAR-TO-DATE Q Q change 1H H 2009 change Trans-Pacific 313, , % 583, , % Asia / Europe 190, , % 371, , % Trans-Atlantic 89,029 84, % 176, , % Intra-Asia / Australasia 588, , % 1,098, , % T OTAL A LL S ERVICES 1,181,356 1,020, % 2,230,097 1,998, % TOTAL REVENUES (USD 000 s) : Trans-Pacific 510, , % 893, , % Asia / Europe 326, , % 603, , % Trans-Atlantic 143, , % 271, , % Intra-Asia / Australasia 412, , % 757, , % T OTAL A LL S ERVICES 1,391, , % 2,526,070 1,823, % Liftings increased by 4.4% on our Trans-Pacific services compared with the corresponding period last year. Total revenue increased by 18.6% and average revenue per TEU increased 13.6% compared to the first half of Average revenue per TEU increased consistently throughout the period to a more sustainable level. From the trough in the second quarter of 2009, our Asia / Europe services made a steady recovery in the second half of last year and a general positive momentum, despite rate volatility, carried forward well into In the first half of 2010, lifting levels were up 10.9% while revenue per TEU almost doubled from the previous low of the corresponding period of last year. Liftings increased by 16.4% on our Intra-Asia services compared with the first half of 2009, due to a strong economic recovery in emerging economies in Asia. Revenue grew by 36.1%, with average revenue per TEU increasing by 16.9%. Liftings on our Australasia service increased by 24.0% compared with the same period last year

29 Liftings on our Trans-Atlantic services increased 3.9%, while total revenue increased 10.7% against the same period last year, or 6.6% growth in average revenue per TEU. Stabilization of the market and a better balance of supply and demand helped with our performance in the first half of the year. Bunker price remained steady, around US$465 per ton for the first half of During the first half of 2010 the Group took delivery of five P Class 4,578 TEU Panamax size vessels (OOCL Le Havre, OOCL Charleston, OOCL Guangzhou, OOCL Savannah, and OOCL Jakarta) and four SX Class 8,063 TEU vessels (OOCL Seoul, OOCL Washington, OOCL London, and OOCL Luxembourg). No new orders for vessels were placed in the first half of 2010 and no new deliveries are scheduled for the second half of the year. With the sale of the Group's PRC property development activities conducted under OODL, the Group s remaining activities relate to management of the Group s liquidity and investments. Within our portfolio we retain two unlisted property investments, namely Wall Street Plaza in New York, and Beijing Oriental Plaza in Beijing. The vacancy rate of Wall Street Plaza was 8.4% at the end of June and operations are in line with expectations. As at 30th June 2010, there was no change in the existing US$150 million valuation of Wall Street Plaza. Beijing Oriental Plaza is also performing as forecast. While it continues to make modest profits at the project level, Beijing Oriental Plaza is not expected to make a meaningful contribution to Group profitability in the near term. Looking Forward While the strengthened demand experienced in the first half of the year has seen a welcome return to profitability for the industry, some caution is warranted to the extent that the demand has been driven by inventory level changes and is not necessarily indicative of actual underlying consumer demand during the period. Should second-half demand for consumer products and semi-finished goods prove to be as strong as is being anticipated, conditions for the container industry should remain positive for the remainder of the year and into While it is hoped that initial indications of improved consumer confidence and demand grow, we have yet to see the full effects of the sovereign debt crisis in Europe, of the generally slow growth in OECD economies, and of the ongoing withdrawal of various governments stimulus programs. While progress has been made in absorbing the newbuild capacity coming on-stream, projected capacity increases continue to exceed forecast demand growth into 2011 and beyond, with the global economic recovery continuing at a subdued pace

30 Nevertheless, OOCL will continue to seek to meet its customers needs and expectations through the reintroduction of tonnage on its various trade routes as market conditions improve. This will be done in a manner that is mindful of the need to operate profitably and for the business to produce a fair and reasonable return on capital. The result for the first half of the year has been pleasing given the difficult environment we faced last year. While the outlook for the remainder of the year is generally positive, the industry s reaction to supply and demand conditions in the fourth quarter will be key to the full-year result and for sentiment going into Interim and Special Dividends The Directors are pleased to announce the payment of a total dividend of US51.5 cents (HK401.7 cents at the exchange rate of US$1 : HK$7.8) per ordinary share for the six months ended 30th June 2010, which is comprised of an interim dividend of US11.5 cents (HK89.7 cents) and a special dividend of US40 cents (HK312.0 cents) as a result of the disposal of the Group s property development business in the People s Republic of China, to be paid on 21st September 2010 to the shareholders of the Company whose names appear on the register of members of the Company on 6th September Shareholders should complete the Dividend Election Form (if applicable) and return it to the Company s Hong Kong Branch Registrar, Computershare Hong Kong Investor Services Limited at 17M Floor, Hopewell Centre, 183 Queen s Road East, Wanchai, Hong Kong not later than 4:30 p.m. on 9th September Closure of Register of Members The register of members of the Company will be closed from 3rd September 2010 to 6th September 2010, both days inclusive, during which period no transfer of shares will be registered. In order to qualify for the interim dividend and the special dividend, transfer forms accompanied by the relevant share certificates must be lodged with Computershare Hong Kong Investor Services Limited not later than 4:30 p.m. on 2nd September Purchase, Sale or Redemption of Shares During the six-month period ended 30th June 2010, the Company has not redeemed any of its shares and neither the Company nor any of its subsidiaries has purchased or sold any of the Company s shares. Pre-emptive Rights No pre-emptive rights exist under Bermudan law in relation to the issue of new shares by the Company

31 Corporate Governance Compliance with the Code on Corporate Governance Practices The Board of Directors (the Board ) and management of the Company are committed to maintaining high standards of corporate governance and the Company considers that effective corporate governance makes an important contribution to corporate success and to the enhancement of shareholder value. The Company has adopted its own code on corporate governance practices (the CG Code ) which in addition to applying the principles as set out in the Code on Corporate Governance Practices (the SEHK Code ) contained in Appendix 14 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the Listing Rules ), also incorporates and conforms to local and international best practices. The CG Code sets out the corporate governance principles to be applied by the Group and is constantly reviewed to ensure transparency, accountability and independence. Throughout the six months ended 30th June 2010, the Company has complied with the SEHK Code, except that there is no separation of the role of Chairman and Chief Executive Officer. Mr. TUNG Chee Chen currently assumes the role of both Chairman and Chief Executive Officer of the Company. The executive members of the Board currently consist of chief executive officers of its principal divisions and there is effective separation of the roles between chief executives of its principal divisions and the Chief Executive Officer of the Company. The Board considers that further separation of the roles of Chief Executive Officer and Chairman would represent duplication and is not necessary for the time being. Audit Committee The members of the Audit Committee currently comprise four Independent Non- Executive Directors, with the Head of Internal Audit of the Company as the secretary and the Company Secretary as the assistant secretary. The Audit Committee has reviewed the Group s interim results for the six months ended 30th June Remuneration Committee The members of the Remuneration Committee currently comprise the Chairman and two Independent Non-Executive Directors of the Company, with the Company Secretary as the secretary of the Committee. Securities Transactions by Directors The Company has adopted its own code of conduct regarding securities transactions by Directors (the Securities Code ) on terms no less exacting than the required standard set out in the Model Code for Securities Transactions by Directors of Listed Issuers (the Model Code ) contained in Appendix 10 to the Listing Rules

32 All Directors have confirmed, following specific enquiry by the Company, that they have fully complied with the required standards set out in both the Model Code and the Securities Code throughout the period from 1st January 2010 to 30th June Publication of Results Announcement and Interim Report This interim results announcement is published on the websites of The Stock Exchange of Hong Kong Limited ( HKEx ) at and the Company at The 2010 Interim Report will be despatched to shareholders of the Company on or around 27th August 2010 and will also be available on the HKEx s website and the Company s website. Employee Information As at 30th June 2010 the Group has 7,458 full time employees whose salary and benefit levels are maintained at competitive levels. Employees are rewarded on a performance related basis within the general policy and framework of the Group s salary and discretionary bonus schemes based on the performance of OOCL which are regularly reviewed. Other benefits are also provided including medical insurance and pension funds and social and recreational activities are arranged around the world. Directors As at the date of this announcement, our Executive Directors are Messrs. TUNG Chee Chen, CHOW Philip Yiu Wah, Kenneth Gilbert CAMBIE and TUNG Lieh Sing Alan; our Non-Executive Director is Mr. KING Roger and our Independent Non-Executive Directors are Mr. Simon MURRAY, Mr. CHANG Tsann Rong Ernest, Professor WONG Yue Chim Richard and Mr. CHENG Wai Sun Edward

33 Forward Looking Statements This announcement contains forward looking statements. Statements which are not of historical facts, including statements of the Company s beliefs and expectations, are forward looking statements. They are based upon current plans, estimates and projections and, therefore, no undue reliance should be placed upon them. Forward looking statements are correct only as of the day on which they are made. The Company has no obligation and does not undertake to update any of them publicly in the light of fresh information or of future events. Forward looking statements contain inherent risks, uncertainties and assumptions. The Company warns that should any of these risks or uncertainties ever materialise or that any of the assumptions should prove incorrect or should any number of important factors or events occur or not occur, then the actual results of the Company may differ materially from those either expressed or implied in any of these forward looking statements. On behalf of the Board Orient Overseas (International) Limited TUNG Chee Chen Chairman Hong Kong, 4th August 2010 For identification only Website :